by Joseph Ngwawi – SANF 05 No 106
Long viewed as the weakest link in the international trade arena, Africa has finally decided to shake off the underdog tag and is demanding to be taken seriously by its partners, starting with this month’s World Trade Organisation (WTO) ministerial meeting.
Going into the 13-18 December WTO meeting in Hong Kong, the continent has set tough conditions for the trade talks as part of its response to an international trade system not sympathetic to the weak.
According to a document prepared after a meeting in November of African ambassadors based in Belgium, Africa will demand fair trading practices with regards to the contentious issue of agricultural subsidies, especially for cotton.
The WTO’s Doha round of trade talks stumbled largely over the broad issue of agriculture. Developing countries are pressing rich nations to slash subsidies and import tariffs which are accused of skewing farm trade against the poor.
Africa’s cotton-producing countries, which include several member states of the Southern African Development Community (SADC) regional bloc, are not happy with proposals set out in the draft ministerial statement already prepared by WTO director general, Pascal Lamy.
The draft communiqué does not address the real issues that African cotton producers would want to see tackled by the international community. The Africans want real commitment from developed countries on action on market access, domestic support and export competition.
The statement failed to press WTO members on a plan to help African cotton producers cope with competition from their counterparts, mainly in the United States, who benefit from government subsidies that drive down global prices.
African countries have called for a phased-out cut in rich nations’ cotton subsidies, saying help for exporters should be halted by the end of this year. They also want 80 percent of other subsidies to be removed by the end of 2006, and the rest to be eliminated by 2009.
They will also demand duty-free and quota-free access for cotton and cotton products from least-developed countries; an emergency fund to help deal with depressed international prices and technical and financial assistance for the cotton sector in Africa.
Regarding market access, the African position is that the size of total market access should increase instead of a mere redistribution of existing opportunities so that all African countries individually can gain enhanced access
New market access should be more than merely repackaging the existing opportunities currently available to groups of African countries outside of the WTO such as those under the United States’ African Growth and Opportunity Act and the EU’s Everything-But-Arms arrangements, according to the document prepared at the end of the ambassadors’ meeting.
The meeting, held on 21 November and jointly organised by the Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI) and the Institute for Global Dialogue (IGD), was also attended by parliamentarians and representatives of inter-governmental organisations and civil society organisations.
African governments believe that enhanced market access must be based on the concept of non-reciprocity or at least substantially less than full reciprocity and that developing countries’ access to their own domestic and regional markets must not be eroded by any future WTO pact.
“This will ensure that net market access gains accruing to developing countries should be substantially greater than the gains to developed countries,” says the document produced at the end of the meeting.
There must also be a level playing field when it comes to rules on trade. This, they argue, can only be achieved if all existing WTO rules and agreements are examined to “affirm, clarify and increase the policy space options of developing countries, including through immediate and positive action on the implementation-related issues and concerns raised by developing countries.”
This means that there must be no additional constraints on the domestic policy-making choices of developing countries and that any new rules that are negotiated will be strictly limited to trade only.
Dubbed the “development agenda”, the Doha Round of WTO trade negotiations – which was launched in Qatar in 2001 — has largely failed to live up to its promise of using trade to reduce poverty.
To the contrary, Sub-Shararan Africa’s share of global trade has continued on a free-fall, thanks to the hostile operating environment promoted by rich nations.
Zanzibari president Amani Abeid Karume said Africa and least developed countries have not benefited from world trade expansion.
“To the contrary,” said Karume, “the market share of Sub-Saharan African countries has declined from about five percent in the 1970s to less than two percent today.” Karume was speaking at the Africa preparatory meeting in November in Arusha, United Republic of Tanzania.
He said Africa’s participation remains confined to commodities that are exported in their natural state because few countries on the continent have the abilities to add value to their commodities.
Karume said the continent will continue to fare badly on international markets because of stagnant demand for commodities and competition from substitute products.
As a result of low international demand, prices of commodities like coffee, vanilla and cloves have plummeted drastically during the past five years, threatening the livelihood of several millions of people on the continent.
A kilogramme of vanilla, for instance, now sells for US$6.50 on the international market, a massive 96 percent drop from the US$180 a kg farmers used to get in 2004.
Madagascar, a member of SADC, is the world’s largest producer of vanilla. The commodity is the Indian Ocean island’s chief export.
Africa also goes to the Hong Kong meeting limping from the recent sweeping sugar reforms introduced by the EU.
Under the present arrangement, the EU offers a guaranteed price for sugar that is paid for, in effect, by consumers, with the union buying from producers at about three times the average world market price.
The reforms, which come into effect on 1 January 2006, will slash the guaranteed price by 36 percent and make US$7.4 billion available to European sugar farmers and refiners over the next four years during which the reform is phased in.
The move is expected to hurt developing countries such as Mauritius and Swaziland that depend on sugar exports.
However, whatever the outcome of the Hong Kong conference, Africa believes the time is now to engage its partners not as a poor cousin but as an equal partner with something of value to offer to the world.
